Nvidia H20 Chip Licenses Stalled by Commerce Department Backlog

AI Chip Sales to China Face Delays Despite Initial Approval

Despite an initial authorization in July from U.S. Secretary of Commerce Howard Lutnick allowing sales of specific AI chips to China, several manufacturers, including Nvidia, are experiencing continued delays.

License for H20 AI Chips Still Pending

Reports from Reuters indicate that Nvidia has not yet been granted a license to begin selling its H20 AI chips within the Chinese market.

Internal Issues Cause Licensing Backlog

The U.S. Department of Commerce is currently facing a significant backlog in processing licensing applications.

This situation stems from internal disruptions, notably staff departures and impaired communication channels with industry stakeholders, as detailed by Reuters.

National Security Concerns Remain

The delays occur amidst growing calls from national security analysts for restrictions on Nvidia's sale of H20 AI chips to China.

These experts cite potential national security risks as the primary justification for limiting access to this technology.

Further Considerations

• The initial approval granted in July was intended to permit the sale of certain, less powerful AI chips.
• The H20 chip represents a more advanced capability, prompting heightened scrutiny.
• The Department of Commerce’s internal challenges are exacerbating the uncertainty for chipmakers.

The situation remains fluid, with the outcome of the licensing applications potentially impacting the future of AI chip exports to China.